The North American currency throughout the 20th century has been positioned on a pedestal from which it has been almost indeclinable. So much so that it is already part of popular culture to know the denominations of the dollar bills , as well as their characters.
It is the concession of the generalization of the use of currency in all economic areas of citizens regardless of their location, stratum or condition.
We will feel the symbolic pedestal that we refer to in everyday situations. An example, the invoicing of services of companies or common consortia in the day to day in cities.
Such is the case of UBER, which anchors its billing to the Northern currency , because UBER charges in dollars and not in the local currency , it is a clear example of the hegemony of this currency.
Here we are going to explain why fluctuations in the dollar occur with other currencies. In addition, we will show you its influence on the world market if its price falls.
Green hegemony of the US dollar
Motivated by the bellicosity of the last century, many of the world economies were in stagnation, since the great powers were at war.
This leads to an irregular behavior of the markets that reduces profits and the flow of capital to investors and industries . The United States had a large industrial apparatus, allowing it to cope with widespread trade setbacks.
As we know greatly, the importance of money in our lives , society and business is central. And even more so in times of deficiency, the countries most affected by the war events were precisely those who could, in any case, put market competitiveness .
But the general decline fuels the need for loans in US dollars, since it was the country that could economically help the scourged European and Asian markets.
At the beginning, it becomes compulsory and logical, but as time passes, it becomes a trend for safeguarding and protecting capital. Since the devaluation processes in this currency are not as marked as in others.
The public will now append the trust and referential value . All of this makes people feel safer with dollars than with regional currencies.
If the US dollar is so stable, why is it fluctuating?
Stability will always be relative. Being stable does not mean being static and invariable , otherwise it would not be economy. Stability will be given by the levels of change that a regional economy can sustain and in the case of the dollar.
This stability in the markets and the careful safeguarding of reserves keeps the market stable. Remember that the printing of the banknotes is subject to the backing of it.
An imbalance in the markets involves a disproportion between the poles of supply and demand. This suggests that the greater the quantity of an element, its value will be diminished due to the great ease of finding it. On the other hand, the same thing happens but in the opposite direction with scarcity. As there is little of an element, its price shoots up.
That is why local economies are affected by supply and demand, it is not that it is worth more or less at certain times, it is that there are times when there is more or less physical currency which makes your acquisition more relaxed or more devious.
But this occurs in localities where high devaluation processes are not experienced, that is, hyperinflation. In these cases it is a breeding ground for fluctuation. For example, when the local currency is devalued, the States increase salaries, and the effects of the salary increase in the market are sharp, since many go to the purchase of foreign currency to protect their assets, destabilizing the balance of demand.
What happens if the value of the US dollar falls?
This will be subject to the situation of which it is spoken, if it happens due to a general loss worldwide of the value or purchasing power of the dollar , it would be a great crisis, like releasing Pandora’s box, but this does not happen.
Usually its value falls due to massive offering shares . What could be translated into particular advantages of the regions for the commercialization of their products.
In the same way, the fall of the dollar would directly affect the economy of all the countries that use this currency as the official currency within their territory.